Sell up or the squatters will move in

One council is warning landlords to sell up or get squatters. We reveal the measures councils can take to fill up neglected homes, the effects of squatters, and what you can do about an empty home in your area.

The Rat and Mouse blog (of which Prime Location is a big sponsor and advertiser) sometimes reports on squatters in central London. Recently it claimed that Westminster Council has issued a warning to the owners of derelict - yet still very expensive - Mayfair private properties. It is telling them to sell or to face a squatter infestation.

This is at a time when 300,000 homes are lying empty for long periods of time, says Halifax, most of which are unrelated to the recession, and a huge chunk of them are in growing towns and cities. Even before the financial crisis, London, for example, had 40,000 or more homes that were empty for at least six months and many for a decade.

Property speculators and those using property to reduce their tax bills are to blame for these empty homes. The problem does not just push up the price of housing, but it makes it harder for the four million or so on the rapidly-growing housing waiting list to find homes. Long-term empty homes decrease the attractiveness of an area, make it harder for neighbours to sell and, what's more, they attract vandals and arsonists who are often not content to attack the derelict buildings but go for next door as well.

What is being done?

Empty homes are not good for the nation (or neighbours), so it's up to local councils to do something about it. Barring more creative thinking, they currently have these options:

• Councils can pay grants to landlords to do up their own buildings. This may be anything up to £25,000. The average cost of putting an empty home into use is £10,000, whereas the cost of building new is, on average, £100,000, making free money better than the obvious alternative. Still, it's not ideal to pay landlords to do what we with think they should do anyway.
• Councils can negotiate short-term lets on behalf of those in greatest need.
• Councils can compulsorily purchase the property, but this is very draconian.
• Councils in England and Wales can take over the management of the property for one to eight years. This has only been possible since the middle of 2006, but in the three years to July 2009 just 24 properties have started to be managed in this way, showing that this new measure is as yet not much of a threat to landlords. Indeed, there seems to me to be too many ways a landlord can evade it for it to be taken seriously.

Mixed results from councils

Overall, councils face quite a lot of difficulties at persuading or coercing landlords to behave socially responsibly, yet some of them are very good at it; those councils committed to doing something are having success. However, almost a hundred, according to the Empty Homes Agency, do very little or nothing at all.

Squatters more effective than some councils

Which takes me back to Westminster Council's warning to sell up or face squatters. It was a good one, as the threat of squatters must really bother a lot of landlords, whether because of the financial implications or simply the idea of some people getting something from them for nothing.

The view from landlords on squatters is surprisingly mixed and not all one of hatred. I've met a couple of landlords who were actually happy to have squatters, because they kept their properties in good condition and kept vandals away at a time when the properties would otherwise be empty and unused.

Mostly, though, squatters are not welcome at all. They are a terrible and unfortunate pest for those landlords whose properties are infested in between tenancies. Thankfully, this is relatively rare, because squatters tend to look for places in which they're likely to be able to stay longer, which means homes that have been neglected for a long time.

What can we do?

Most of you will agree that it's not a good state of affairs when we're relying on squatters to ensure landlords behave responsibly. There is a simple solution. Rather than making empty homes council-tax free, residencies that are empty for long periods should be charged many times the normal rate to force landlords to fill them or sell up. Those landlords who can't should be aided by grants to restore the homes, paid for using the extra taxes.

That's what the government could do. What you can do is to report an empty home to your local council. There may be a special 'empty homes officer' assigned to deal with these properties and ensure that action is taken to address the problems they cause. Type 'report empty home' and the name of your council into Google to find out exactly who to contact.

The Empty Homes Agency, a charity which exists to highlight the waste of empty property in England, publishes the following advice on how landlords can put empty homes back into use:

• How to put your empty home back into use.
• How to rent your empty house.
• How to sell your empty house.
• How to fill a property temporarily whilst you're developing of your longer-term plans.

Homeseekers and wannabe landlords should read:

• How to buy or rent an empty home.
• How to find an empty property and find its owner.
• Read a checklist to ascertain if it's a good investment.
• Look for grants.
• Get guidance on where to get specialist mortgages for restoration properties.

Get help from lovemoney.com

If you need a bit of help with a mortgage, use our resources.

First, adopt this goal: Cut your mortgage costs

Next, watch this video: Getting through the mortgage maze

And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

Compare mortgages through lovemoney.com's award-winning, fee-free, whole-of-market mortgage service.

More: The worst is yet to come for homeowners | House prices won't fall again for years